Here's the deal

by barry pearce on 10/15/01

Emerson PointeAs housing prices have risen during Chicago’s real estate boom of the last decade, the word “affordable” in reference to new developments has become almost meaningless. How can anyone call a home priced at $250,000 or $300,000 affordable with a straight face? The answer is that it’s not so hard when the high end in many planned downtown buildings is several million dollars.

Like all prices, those for new homes are relative, and affordability is in the eye of the beholder.

“With the interest rates coming down and when you’re renting a two-bedroom apartment for $2,500 a month, two-bedroom condos under $299,000 are what downtown seems to consider affordable,” says Ted Guarnero, of Rubloff Residential. “A one-bedroom for $199,000 or less now brings you into almost the same as you would pay for rent.”

Guarnero says that the demand for “affordable” condos downtown is higher than ever. And with the real estate market easing up and a general slowdown in the economy, developers may be shifting gears, moving away from the $300,000 and up luxury market toward more reasonably priced product.

Guarnero cites the Park Alexandria, by Magellan Development Group, as an example of a new downtown highrise selling quickly because its units are tailored to this affordable price point. The tower planned for 125 S. Jefferson has one-bedrooms starting in the $180s.

Despite the double-digit price increases of the last six years, deals can be found in the city for those willing to look, and willing to explore new neighborhoods. The South Loop, you will notice after a day of visiting open houses, is generally more affordable than the West Loop. As you move farther south, to Bronzeville and Hyde Park, prices are even lower. As you travel north along the lakefront, the same trend occurs, although Edgewater and Uptown are no longer the bargains they once were. Travel northwest and you’ll see even more deals, but much less product.

The lake effect

One way to think of Chicago’s housing boom is to picture rings of development emanating from the Loop. Throughout the ’80s and ’90s, distressed land around the city’s center, much of it vacated by industry, has been redeveloped. Whole new neighborhoods have been carved in the South Loop, the West Loop and River North. The rings continue to spread, now affecting the Near South Side, the Near North Side and the Near Northwest Side. It follows then, that the closer you look to the center of these concentric circles of development – the Loop – the higher prices tend to be. The other major factor to consider is the lakefront, which works in a similar way. Generally, the farther you look from the lake, the lower prices tend to go.

These principles are far from absolute. Lincoln Park is much farther from downtown than the South Loop but it’s also far more developed and settled and much more expensive. Sauganash and Edgebrook, on the far Northwest Side, have evolved like suburbs though they fall within the city limits. Land is scarce in these desirable neighborhoods and when something does get built it’s usually at a high price point.

The broad areas where you will find significant building, including condo conversions and affordable prices, are the Near South, the South Side and the Near Northwest Side. Buyers also can find deals on the far North and Northwest Side of the city, but there tends to be much less product to choose from in these neighborhoods, especially on the Northwest Side.

Near South

River CityDeals are becoming harder to find in the South Loop, much harder than even a few years ago. Loft and townhome projects have been filling in the gaps between the larger communities of Printers Row, Central Station and Dearborn Park, which have provided a foundation for the neighborhood. The largest loft development underway, for example, is Dearborn Tower, 1530 S. State. The 317 units in this project have averaged more than $200,000, with some units priced significantly higher.

The South Loop, however, remains less expensive than the West Loop or River North, two other booming nearby neighborhoods. That’s partly because the area is still low on density and amenities, although population and convenience have been growing each year. New lofts, condos and townhomes have sprouted on nearly every block in the South Loop, while the advent of new Dominick’s and Jewel grocery stores, as well as restaurants such as the Firehouse and Gioco, has made the area more livable.

Deals to watch for include Legacy Development’s Prairie Avenue Lofts, 221 E. Cullerton. The units have one to three bedrooms, with 950 to 1,400 square feet, and prices starting in the $180s. The lofts have ceilings of 10 to 12 feet, hardwood floors, private balconies, in-unit laundries and fireplaces. Another loft development, Engravers Lofts at Bank Note Place, 1910 S. Indiana, has 83 units, priced as low as the $160s. The project includes both converted loft space in an existing building as well as new-construction units.

River City, American Invsco’s conversion of the landmark serpentine complex at 800 S. Wells, also is priced for first-time buyers. When it opened, close to 300 condos in the 448-unit complex were priced under $200,000. Studios start in the $160s. That’s a competitive price point in most locations, but especially on the edge of the Loop, walking distance from the Board of Trade. The price looks even better when you consider an amenities package that includes a grocery store, a Bally’s Sports Club, a private shuttle bus to downtown, a rooftop deck, a valet service, a dry cleaner, a one-acre private park, 24-hour door staff and a marina with 64 boat slips.

South Side

As you move south of Cermak, prices again begin to fall again. The South Side has been underdeveloped since white flight scarred so much of its housing, but many strong neighborhoods have survived and developers are paying new attention to this part of the city, from Bronzeville to Hyde Park to Chesterfield. The reasons – lower acquisition costs, more available land and an under-served market with pent-up demand – are apparent. These conditions have existed for a long time, but builders no longer have to take it on faith that they can sell homes to the south.

Columbia Pointe, a 140-unit development of new homes in Woodlawn, is a case in point. The project has sold out its first phase in a neighborhood that has suffered its share of urban ills but is struggling to improve. Construction is underway on five model homes, ranging from about 1,430 square feet to 3,467 square feet, with base prices from the $190s to the $360s. The project is a joint venture of the Woodlawn Organization, the Woodlawn Preservation and Investment Council, the Woodlawn Community Development Organization and the Neighborhood Rejuvenation Fund.

South Commons, an 886-unit community on South Michigan Avenue between 26th and 31st streets by the Habitat Company, has been well known on the South Side as a strong rental complex. The success of the rentals has carried over into their new life as condominiums as hundreds of units sold in the last few years. Only one building is left to convert, the Stratford, at 2605 S. Indiana, where one- and two-bedroom units are priced from the $90s.

Lake Shore Pointe, 7032 South Shore, is an 87-unit development by Shore Bank Development, an arm of South Shore Bank. These condos and townhomes have two or three bedrooms and prices starting in the $120s.

Near Northwest

Like the South Loop, the Near Northwest Side is not the haven for housing deals that it once was. Prices have increased rapidly in neighborhoods such as Wicker Park, Bucktown and East Village, and some observers wonder whether the numbers have become inflated in what are often gritty urban locations.

Fortunately, development has pushed to other corners of the Near Northwest Side as land costs have gone up in Wicker Park and Bucktown, and as loft buildings have become harder to find. Neighborhoods such as River West, Logan Square and Avondale are now host to a spate of conversions and even some loft and townhome development.

Jameson Realty Group has been active in Logan Square and Humboldt Park with a number of vintage condo conversions. Currently, the brokerage is selling an eight-unit conversion at 3513 W. Medill that has three-bedroom two-bath units from the $180s. Another Jameson conversion is in an eight-flat at 3558 W. Shakespeare. This building has two-bedroom units with one bath priced from the $140s to the $170s.

Humboldt Park, which developers are struggling to rename “West Bucktown,” has been especially active lately. Buck City Lofts, 1733 N. Rockwell, is a 79-unit loft conversion priced roughly from the $140s to the $300s.Townhouses also have become popular in “West Bucktown,” forced west by exorbitant land costs to the east. Dubin Residential’s Buck Townes, 2555 W. Moffat, has two- and three-bedroom townhouses priced from about the $270s to the $320s. Bucktown 1800, 1823 N. Talman, has townhouses from the $300s and single-family homes from the $400s.

Remember that despite their names, all of these projects are in Humboldt Park, not Bucktown. The neighborhood has many advantages, including lower prices and the beautiful park itself, but it’s also grittier than the enclave of boutiques centered around Damen Avenue that makes up Bucktown proper.

Far North Side

One trick in finding where the deals are is to find where the deals aren’t and look a little to the north or west. Not long ago, Ravenswood offered spectacular single-family homes at a fraction of their cost in Lakeview or North Center, and in a neighborhood every bit as solid and pleasant. That’s no longer the case, but Ravenswood Manor, Albany Park and Irving Park, to the west, are still comparatively affordable. Much of Uptown and Edgewater once offered good housing value but both have become inflated. Rogers Park, however, is undergoing something of a conversion boomlet on the city’s northern edge.

Rogers Park may be the last affordable piece of lakefront Chicago on the North Side. Keller Williams Cardinal Realty and Abels Realty both have been selling a variety of small vintage conversions in the area, often with units priced from under $100,000. Sheridan Shore Courts, 7021 N. Sheridan, is a larger condo conversion, with 65 units a block from the lake. The condos in this project have one or two bedrooms and one bath, priced from the $90s to the $200s.

Dubin Residential has been proving that Rogers Park also can be a good market for townhomes. Emerson Pointe is a 26-unit townhouse project by the developer at 7242 N. Damen. The homes will have one to three bedrooms, one or two baths and 1,357 to 2,243 square feet of living space. Prices range from the $200s to the $310s. Features include hardwood floors on the main living level, gas fireplaces with ceramic surrounds, balconies or decks, two-car attached garages and washer / dryer hookups. The homes are fairly traditional, with face brick, projecting bays and some front porches facing the street.

A little farther south, in Uptown, Polo Tower, 4180 N. Marine, offers low prices for converted highrise apartments. This may not be Streeterville, but it is a highrise with lake views, and it’s just outside of Lakeview, where prices on the same building would be considerably higher. Prices at Polo Tower start in the $140s for one-bedrooms with one bath.

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